Medicare is an integral part of the American health care system, which has helped millions of seniors over the last fifty years. However, according to a recent article by the National Reverse Mortgage Lenders Association (NRMLA), “…like most government programs, it is full of complex rules and regulations…,” making it difficult for many to understand. Medicare typically starts at age 65, but there are a number of exceptions to this rule. Let’s cover some of the basics — Medicare is divided into four parts:1
Part A covers inpatient hospital care, skilled nursing facilities, hospice, lab tests, surgery, and home health care. Part A is typically free; however, participants will have to pay deductibles and co-pays under certain circumstances like long hospital stays.
Part B covers doctor visits, needed medical equipment, and other outpatient services. According to the NRMLA article, premiums begin at $104.90 per month. They’re on a sliding scale up to an annual income of $214,000. Once you’ve met your deductible, Medicare usually pays for 80% of expenses.
Part C allows private health insurance companies approved by Medicare to provide Medicare benefits. You may have also heard this called “Medicare Advantage.”
Part D covers prescription drugs. These costs vary by company, state, and whether you have complex drug needs. Part D carries a separate premium, which is tied to one’s income. The article states that premiums can range from $12.70 to $72.90 per month. “But Part D has the notorious ‘donut hole,’ which means that after you and your plan have spent around $3,300 on prescription drugs, there is a ‘coverage gap’ before payments start again.” Another factor that determines how much you’ll pay is whether your regular prescriptions are generic or brand name.
“What all this means is that for most seniors, Medicare alone isn’t enough.” This is where “supplemental” or “Medigap” policies come in. While these policies help make up some, or hopefully most of the difference, you will need a separate policy for B and D. According to the article, there are ten standardized supplemental plans available through various companies such as United Healthcare and Blue Cross. It’s important to do your homework when picking a plan as costs vary depending on what they cover.1
If you find that you’re struggling to cover the cost of health care, a reverse mortgage loan may be able to help. If you’d like to learn more about reverse mortgages, please use our Reverse Mortgage Calculator or call 800-218-1415.
1 The official magazine of the National Reverse Mortgage Lenders Association, “Supplemental Health Insurance – Your Costs Beyond Medicare,” by Mark Olshaker, Nov-Dec 2016, Volume 9, No. 6
Author: Meredith Manz